Question 1

In a job-costing system,explain why it is necessary to apply indirect costs to production through the use of a budgeted indirect-cost rate.

Accepted Answer

First,actual manufacturing overhead cost

Question 2

Beacon Company does residential real estate appraisals.There are 40 professionals on its staff.Each professional is allotted the following number of hours per year:
   
The company receives more jobs than it can handle and therefore rejects most out of town work.The budgeted salary for each professional is $44,000 per year with fringe benefits of $11,000.
During the previous year,the actual salaries were $46,500,plus fringe benefits of $11,500.
Required:
a.What was the total budgeted direct cost rate if the company believes that clients should be charged directly for its employees' salaries and benefits?
b.What was the budgeted direct cost rate if the company wants to charge clients for employee vacation,sick leave,and professional development as an indirect cost?

Accepted Answer

a.Total budgeted direct cost r

Question 3

What is the difference between an actual cost system and a normal cost system?

Accepted Answer

An actual cost system is one that traces

Question 4

ZamTech Moldings allocates manufacturing overhead to jobs based on machine hours.The company has the following estimated costs for the upcoming year:
 
The company estimates that 1,800 direct labour hours will be worked in the upcoming year,while 2,000 machine hours will be used during the year.The predetermined indirect allocation rate per machine hour is closest to

Accepted Answer

A) $56 
B) $36 
C) $100 
D) $15 
E) $40 
A) $56 
B) $36 
C) $100 
D) $15 
E) $40

Question 5

Provide examples of three companies that would likely use job costing,and three companies that would likely use process costing.

Accepted Answer

Students will offer varied examples.From

Question 6

Copley Enterprises manufactures digital video equipment.For each unit $1,475 of direct material is used and there is $1,500 of direct manufacturing labour at $30 per hour.Manufacturing overhead is applied at $35 per direct manufacturing labour hour.Calculate the cost of each unit.

Accepted Answer

A) $2,975 
B) $4,025 
C) $1,750 
D) $3,150 
E) $4,725 
A) $2,975 
B) $4,025 
C) $1,750 
D) $3,150 
E) $4,725

Question 7

A local financial consulting firm employs 30 full-time employees.The budgeted compensation per employee is $50,000.The annual maximum chargeable time to each client is 1,000 hours.Clients always receive their full amount of time.All labour costs are included in a single direct-cost category and are traced to jobs on a per-hour basis.
Any other costs are included in a single indirect-cost pool,allocated according to professional labour-hours.Budgeted indirect costs for the year are $1,050,000,and the firm expects to have 60 clients during the coming year.
What is the budgeted indirect-cost rate per hour?

Accepted Answer

A) $1,050.00 per hour 
B) $50.00 per hour 
C) $35.00 per hour 
D) $17.50 per hour 
E) $10.00 per hour 
A) $1,050.00 per hour 
B) $50.00 per hour 
C) $35.00 per hour 
D) $17.50 per hour 
E) $10.00 per hour

Question 8

LeBlanc Company has the following balances as of the year ended December 31,2015.
   
Additional information is as follows:
   
Required:
a.Compute beginning direct materials inventory.
b.Compute beginning WIP inventory.
c.Compute beginning finished goods inventory.
d.Compute actual factory overhead incurred.

Accepted Answer

a.$47,000 - $41,000 + $15,000 = $21,000

Question 9

Which of the following is one of the steps used in assigning manufacturing overhead costs to individual jobs?

Accepted Answer

A) combine different cost objects into pools 
B) assign direct costs to the cost object 
C) identify the direct cost pools associated with the job 
D) calculate the direct cost allocation rate for each direct cost pool 
E) select the cost-allocation base to use in allocating indirect costs to the cost object 
A) combine different cost objects into pools 
B) assign direct costs to the cost object 
C) identify the direct cost pools associated with the job 
D) calculate the direct cost allocation rate for each direct cost pool 
E) select the cost-allocation base to use in allocating indirect costs to the cost object

Question 10

Camden Company gathered the following information for the year ended December 31:
 
Clyde Company uses a job costing system.What is the indirect cost allocation rate for the year be using direct labour hours as the allocation base?

Accepted Answer

A) $1.11 per direct labour hour 
B) $0.90 per direct labour hour 
C) $1.20 per direct labour hour 
D) $0.60 per direct labour hour 
E) $0.47 per direct labour hour 
A) $1.11 per direct labour hour 
B) $0.90 per direct labour hour 
C) $1.20 per direct labour hour 
D) $0.60 per direct labour hour 
E) $0.47 per direct labour hour

Question 11

Budgeted fixed indirect costs remain constant at $150,000 per month.During high-output months variable indirect costs are budgeted at $120,000,and during low-output months budgeted variable costs are $60,000.What are the respective high and low indirect cost rates if budgeted professional labour-hours are 6,000 for high-output months and 2,000 for low-output months?

Accepted Answer

A) $31.25 per hour,$87.50 per hour 
B) $45.00 per hour,$95.00 per hour 
C) $45.00 per hour,$105.00 per hour 
D) $56.20 per hour,$105.00 per hour 
E) $59.00 per hour,$105.00 per hour 
A) $31.25 per hour,$87.50 per hour 
B) $45.00 per hour,$95.00 per hour 
C) $45.00 per hour,$105.00 per hour 
D) $56.20 per hour,$105.00 per hour 
E) $59.00 per hour,$105.00 per hour

Question 12

JamJee Enterprises uses a job costing system.Record the following transactions in JamJee Enterprise's general journal for the current month:
a.Purchased raw materials on account,$49,000.
b.Requisitioned $25,200 of direct materials and $3,400 of indirect materials for use in production.
c.Factory payroll incurred,$54,000;70% direct labour,30% indirect labour.
d.Recorded depreciation expense factory equipment $9,200,and other manufacturing overhead of $26,870 (credit accounts payable).
e.Allocated manufacturing overhead costs based on 120% of direct labour cost.
f.Cost of completed production for the current month,$95,800.
g.Cost of finished goods sold,$79,000;selling price,$115,000 (all sales on account).

Accepted Answer

The answer of JamJee Enterprises uses a job costing system.Record...

Question 13

A cost allocation base is only financial in nature,and is usually the cost driver of the particular costs being measured.

Accepted Answer

A) True 
 B)False

Question 14

Instead of proration,a company could choose to simply write-off the balance of any underallocated overhead to cost of goods sold providing the amount is immaterial.

Accepted Answer

A) True 
 B)False

Question 15

Fox Manufacturing is a small textile manufacturer using machine-hours for the single indirect cost allocation rate to allocate indirect manufacturing costs to the various jobs contracted during the year.The following estimates are provided for the coming year for the company and for the Maize High School Science Olympiad job.
   
Required:
a.For Fox Manufacturing,determine the annual manufacturing indirect cost allocation rate.
b.Determine the amount of manufacturing overhead costs allocated to the Maize High School job.
c.Determine the estimated total manufacturing costs for the Maize High School job.

Accepted Answer

a.Manufacturing indirect cost

Question 16

Which of the following is NOT possible to use as a cost allocation base for manufacturing overhead?

Accepted Answer

A) direct labour dollars 
B) direct labour hours 
C) direct material dollars 
D) direct labour hours or dollars 
E) indirect labour hours 
A) direct labour dollars 
B) direct labour hours 
C) direct material dollars 
D) direct labour hours or dollars 
E) indirect labour hours

Question 17

The Dougherty Furniture Company manufactures tables.In March,the two production departments had budgeted allocation bases of 4,000 machine hours in Department 100 and 8,000 direct manufacturing labour hours in Department 200.The budgeted manufacturing overheads for the month were $57,500 and $62,500,respectively.For Job A,the actual costs incurred in the two departments were as follows:
   
Job A incurred 800 machine hours in Department 100 and 300 manufacturing labour hours in Department 200.The company uses a budgeted indirect cost allocation rate for applying overhead to production.
Required:
a.Determine the budgeted manufacturing indirect cost allocation rate for each department.
b.Prepare the necessary journal entries to summarize the March transactions for Department 100.
c.What is the total cost of Job A?

Accepted Answer

The answer of The Dougherty Furniture Company manufactures tables.In March,the...

Question 18

Direct costs are allocated to the cost object using a cost-allocation method.

Accepted Answer

A) True 
 B)False

Question 19

Cost pools are often organized in conjunction with

Accepted Answer

A) direct labour pools. 
B) the general ledger control accounts. 
C) variable and fixed costs. 
D) direct cost tracing techniques. 
E) cost-allocation bases. 
A) direct labour pools. 
B) the general ledger control accounts. 
C) variable and fixed costs. 
D) direct cost tracing techniques. 
E) cost-allocation bases.

Question 20

The main advantage of using budgeted cost rates rather than actual cost rates is

Accepted Answer

A) budgeted costs allow managers to have cost information on a timely basis. 
B) budgeted costs may be subject to short-run fluctuations. 
C) budgeted indirect-cost rates are known prior to the inception of a new job. 
D) actual indirect-cost rates are affected by work done on other jobs. 
E) budgeted rates are just as accurate and require less effort. 
A) budgeted costs allow managers to have cost information on a timely basis. 
B) budgeted costs may be subject to short-run fluctuations. 
C) budgeted indirect-cost rates are known prior to the inception of a new job. 
D) actual indirect-cost rates are affected by work done on other jobs. 
E) budgeted rates are just as accurate and require less effort.

In a job-costing system,explain why it is necessary to apply indirect costs to production through the use of a budgeted indirect-cost rate.

What is the difference between an actual cost system and a normal cost system?

Provide examples of three companies that would likely use job costing,and three companies that would likely use process costing.

Copley Enterprises manufactures digital video equipment.For each unit $1,475 of direct material is used and there is $1,500 of direct manufacturing labour at $30 per hour.Manufacturing overhead is applied at $35 per direct manufacturing labour hour.Calculate the cost of each unit.

Which of the following is one of the steps used in assigning manufacturing overhead costs to individual jobs?

Camden Company gathered the following information for the year ended December 31: Clyde Company uses a job costing system.What is the indirect cost allocation rate for the year be using direct labour hours as the allocation base?

A cost allocation base is only financial in nature,and is usually the cost driver of the particular costs being measured.

Instead of proration,a company could choose to simply write-off the balance of any underallocated overhead to cost of goods sold providing the amount is immaterial.

Which of the following is NOT possible to use as a cost allocation base for manufacturing overhead?

Direct costs are allocated to the cost object using a cost-allocation method.

Cost pools are often organized in conjunction with

The main advantage of using budgeted cost rates rather than actual cost rates is

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets,variances,and Management Control: I

Flexible Budgets,variances,and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Analysis of Cost Behaviour

Decision Making and Relevant Information

Pricing Decisions, product Profitability Decisions, and Cost Management

Strategy,balanced Scorecard,and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters

Exam 4: Job Costing

In a job-costing system,explain why it is necessary to apply indirect costs to production through the use of a budgeted indirect-cost rate.

What is the difference between an actual cost system and a normal cost system?

Provide examples of three companies that would likely use job costing,and three companies that would likely use process costing.

Copley Enterprises manufactures digital video equipment.For each unit $1,475 of direct material is used and there is $1,500 of direct manufacturing labour at $30 per hour.Manufacturing overhead is applied at $35 per direct manufacturing labour hour.Calculate the cost of each unit.

Which of the following is one of the steps used in assigning manufacturing overhead costs to individual jobs?

Camden Company gathered the following information for the year ended December 31: Clyde Company uses a job costing system.What is the indirect cost allocation rate for the year be using direct labour hours as the allocation base?

A cost allocation base is only financial in nature,and is usually the cost driver of the particular costs being measured.

Instead of proration,a company could choose to simply write-off the balance of any underallocated overhead to cost of goods sold providing the amount is immaterial.

Which of the following is NOT possible to use as a cost allocation base for manufacturing overhead?

Direct costs are allocated to the cost object using a cost-allocation method.

Cost pools are often organized in conjunction with

The main advantage of using budgeted cost rates rather than actual cost rates is

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets,variances,and Management Control: I

Flexible Budgets,variances,and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Analysis of Cost Behaviour

Decision Making and Relevant Information

Pricing Decisions, product Profitability Decisions, and Cost Management

Strategy,balanced Scorecard,and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters